Naimi says global oil supply good

Seoul, December 18, 2012

Both producers and consumers are happy with current crude oil prices and fundamentals, top exporter Saudi Arabia's oil minister Ali Al-Naimi said on Tuesday, adding that given the balance speculators should leave the market alone.

"You know my desire is that people leave the market alone," Naimi told Reuters in an interview in Seoul. "You know why? Because everybody now is happy with where the prices are. Nobody is complaining about high prices or low prices."

"They are no longer sky rocketing or falling down. So I will really leave the market alone."

Brent surged to a high of $128 a barrel in March this year due to supply concerns as tensions between Iran and the West over Tehran's disputed nuclear programme escalated, threatening to derail a nascent global economic recovery.

Saudi Arabia, the world's top oil exporter, responded by boosting output to the highest level in decades to over 10 million barrels per day (bpd) in summer.

Higher supplies, along with a weak global economic outlook and a slowdown in China have since brought down prices about 15 percent to near $108 per barrel.

The US benchmark has held steady between $85 and $90 a barrel and Brent between $100 and $110, Naimi said, calling the prices stable. The oil minister had identified $100 a barrel as a suitable price earlier in the year.

Naimi declined to say what the kingdom's current output level was.

The Opec-member cut output by 230,000 bpd to 9.49 million bpd in November, lowering the producer group's total to 30.78 million bpd, closer to its output target.

Asked if he was concerned about next year's demand growth given the global economic uncertainty, Naimi said: "Mechanisms are working well. Supply is plentiful, demand is good."

On the supply front, he noted high U.S. production along with a recovery in output from Iraq and Libya.

The Organization of the Petroleum Exporting Countries agreed to maintain its oil output target of 30 million bpd at a meeting last Wednesday.

Opec is relaxed about the prospect of rising inventories in the first half of 2013, the group's secretary general separately said, so long as oil prices avoid extreme moves from current acceptable level. Opec's own forecasts show demand for the group's oil will average 29.25 million bpd during the period.-Reuters